7H·

TDIV 22 and 25 📈

It looks as if the $TDIV (-0,11%) would do particularly well in bear markets. I know that this is a great oversimplification and I don't want to explore the reasons here. Instead, I want to take a much more pragmatic view.

A - someone has both ETFs in their portfolio and is now switching from TDIV to the World.

Thanks to the gains from TDIV, he now invests more in World than he initially had capital for and is currently receiving more World shares due to the price decline.

If the market then returns to the overriding trend, significant price gains can be expected.

In this scenario, two "small" levers take effect, so to speak, and you trade anti-cyclically. The biggest challenge is getting the timing right.

B - someone sees this article and now starts to save in the TDVI or makes a one-off purchase. He trades cyclically and momentum-oriented. (In 2022 he would probably have been right for many months, but who knows how long a bear market lasts and when it is over). The biggest challenge is getting the timing right.

C - continues to run a savings plan on both ETFs and believes he is guaranteed to outperform A and B in the long term. (Of course this is not true) but he has read it so often on Getquin that it is impossible to convince him otherwise. 😢

$IWDA (+0,25%)

$HMWO (+0,19%)

$VWRL (+0,13%)

How do you proceed and what are your thoughts on this simple topic?

12 Commenti

Harald@Madhatter5566

If your basic assumption is correct and you have a reasonably functioning crystal ball, A or B sounds relatively good. But nobody has one. Crash prophets will always predict the imminent stock market crash, but it always comes when they don't expect it. They are almost always wrong themselves.

In my opinion, you have tried to shift the Goalpost. Saving in both is done to be diversified and to perform mediocre no matter what. Not to beat the market. In my opinion, if you weren't already trying to poison the well here, this is the better way for those without a crystal ball.

If you want to beat the market, you certainly won't do it with standard ETFs. Smh

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Philip Buß@GoldenShield

@Madhatter5566 the standard ETFs usually also set the benchmark for the "market"
Most of them are always compared with an All World or MSCI, S&P etc.

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Harald@Madhatter5566

@GoldenShield That means you can't beat the market with a standard ETF. Correct. So you don't try to do that with etfs either. Instead, you want to keep up with the market. C is the best option if you are unsure.

That's why I wrote that nili has already tried to poison the well with the statement: beat the market by throwing into both.

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Epi@Epi

If you want to play the optimization game, don't play it on instinct, but systematically.
Find out what the typical mean reversal intervals are for the ETF factors (usually around 12-15 months).
Then define a trading rule on this basis (e.g. always invest at the turn of the year in the ETF that performed worst in the previous year).
Then backtest the rule on different time periods (at least 15 years).
Finally, compare the results including taxes and transaction costs with a simple B&H strategy.
Once you've done that, you can answer all your questions! 👍

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💁‍♀️@_aaaa_

@Epi where to perform such complicated backtests? 🥹

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Epi@Epi

@_aaaa_ Complicated? 😅 It could hardly be simpler.

There are various pages on the net, just search. https://etf-portfolio.com/ is extensive, maybe you can find something there?
Otherwise Python script via ChatGPT.

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💁‍♀️@_aaaa_

@Epi You have to be very careful with ChatGPT for such things. I have often received results that seem plausible but are wrong.

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Epi@Epi

@_aaaa_ Of course, you should be careful. As with everything to do with finances. 👍

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💁‍♀️@_aaaa_

A case for @Madhatter5566 😘

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